European Investment rise of €43bn in new wind energy developments

Figures for clean energy projects in 2020 demonstrate that regardless of the pandemic, investments of 42.8 billion euros went into new wind farms.  This is an eye-opening 75% increase on the previous year, and as reported by WindEurope.

The investments have successfully financed approximately 19.6 GW of capacity, of which 13GW will be in the EU, and will be constructed over the next few years.

Out of the total amount invested a record EUR 26.3 billion was allocated to offshore wind projects, also a record figure, and one that will deliver 7.1 GW of capacity.   Massive projects invested in by Hollandse Kust Zuid in the Netherlands, and Dogger Bank in the UK, pushed the year’s clean energy investments into the record books.

New onshore wind farms only saw investment up to EUR 16.5 billion.  Although this will cover approximately 12.5 GW of new onshore capacity it is still the lowest year of investment since 2017.

According to the trade body, the EU will need to install 27 GW of wind capacity a year to reach its new 55% emissions reduction goal for 2030.  As a result WindEurope commented that despite growth in 2020 the current level of investment is simply not enough to reach Europe’s energy and climate targets.  The main obstacle? Not money.  The investments are all there, but permitting process is painfully slow, so say WindEurope, calling out governments to simplify the rules and boost the number of permitting authority staff.

In line with Boris Johnson announcing the UK will be the ‘Saudi Arabia’ of wind, 13.5 billion euros of investment has gone into new wind projects there. Germany followed with 4.3 billion, France with EUR 6.5 billion, and the Netherlands with EUR 7.9 billion. Behind those countries come Poland and Turkey, both investing EUR 1.6 billion.

Noteworthy is the 70-90% debt-to-equity ratio for wind farms, with bank finance becoming more project-specific for offshore wind projects.

WindEurope commented that the role of PPA’s (corporate power purchase agreements) has grown in assisting wind farms financing.  In 2020 as many as 24 new wind PPAs were covering over 2 GW of capacity.